Combining an old 401k into your new employer's plan is a valid alternative to an IRA. Here is how.
Can you roll an old 401k into a new employer's plan?
Yes, if your new employer's 401k accepts incoming rollovers, which most do. You request a direct rollover from the old plan to the new one, keeping the transfer tax-free and tax-deferred. This consolidates your retirement savings into one workplace account, which can simplify management and may offer strong creditor protection. If you keep working past age 73, funds in your current employer's 401k may also qualify to delay required minimum distributions, unlike IRA funds. Confirm the new plan accepts rollovers before starting. For help comparing options, call 1-800-MEDIGAP at 1-800-633-4427.
401k-to-401k vs. 401k-to-IRA
Rolling an old 401k into a new employer's plan keeps everything in the workplace system, which can mean institutional pricing, the option to delay RMDs while working, and the ability to take a plan loan. Rolling into an IRA usually offers a far wider investment menu and more flexibility, but typically no plan loans and RMDs starting at 73. Neither is universally better. Weigh investment quality, fees, creditor protection, and whether you value continued tax-deferral past 73. Many savers compare the new plan's fund lineup against an IRA before choosing.